The Long View: Infinite Progress.
Investment manager Gary Robinson explains why the pace of invention should continue to speed up.
Progress, as defined by growth in wealth and wellbeing, is not guaranteed. We tend to take it for granted because it has been a consistent feature of our lives.
However, the same cannot be said for our distant ancestors. For them, stasis was the norm. Indeed, the last several hundred years represent the only period in which significant progress has been sustained over many generations.
The late 1600s marked a turning point with the Scientific Revolution, the Enlightenment, and the subsequent Industrial Revolution. It was when the search for knowledge shifted away from customs and authority towards conjecture and criticism.
People rejected mysticism in favour of testable theories. Or as the physicist David Deutsch puts it: “All progress, both theoretical and practical, has resulted from a single human activity: the quest for what I call good explanations.”
In Deutsch’s terms, ‘good explanations’ are those that are hard to vary, in the sense that changing the details would ruin the theory. For example, our explanation as to why we have seasons. If you assume even a small shift in the planet’s axis tilt, the expected outcomes change and become incompatible with the evidence.
Knowledge creation became a compounding process that has fed on itself. The more existing knowledge we have, the more new knowledge we can create.
It is also a never-ending process. The creation of new knowledge helps us solve existing problems. But this, in turn, creates new problems to be solved.
If we accept that the capacity for progress is unbounded, an important follow-on question is: what shape might it take? Will the rate of progress slow down over time? Or remain steady? Or even accelerate?
The more existing knowledge we have, the more new knowledge we can create
In his 1998 paper Recombinant Growth, Harvard economist Martin Weitzman breaks innovation into two phases:
- a generation phase, where two pre-existing ideas are combined
- a processing phase, where the new idea is tested
Weitzman points to Thomas Edison’s search for a filament for his ‘electric candle’ as an example of this combinatorial process. Edison tried 6,000 different materials before settling on a carbonised strip of Japanese bamboo.
The wonderful thing about the combinatorial process is that each fresh idea becomes fuel for further new ideas.
The economist Matt Clancy explores this further in his blog, What’s New Under The Sun?
He points out that once the lightbulb existed, it paved the way for further inventions that used lightbulbs as a technological component. For example, car headlights and helicopter spotlights.
“Combinatorial processes grow slowly until they explode,” he observed.
The maths behind this process is staggering. The equation involved outstrips even the exponential growth of Moore’s Law. And if we assume that new ideas can be created by combining more than two existing ideas, the maths becomes even more extreme.
Weitzman’s model suggests that the processing of ideas eventually becomes the rate-limiting factor.
Ideas grow super-exponentially, but the economy grows exponentially, which means the resources available to explore ideas are limiting. Because of this, rather than accelerating indefinitely, progress settles into an exponential pattern.
This is an interesting hypothesis because it is consistent with what we see in the GDP growth numbers.
Others, including Clancy, have since challenged this conclusion, suggesting reasons why progress could yet lose steam. But I have confidence that the combined computational capacity of humans and machines will continue to grow over time, whether through AI, quantum computing or technologies we have yet to imagine.
It is the nature of progress that there will always be new problems to solve. And with each solution, we take a step forward.
That is an exciting backdrop for investors, entrepreneurs and the world at large.
It also implies that the key to progress, as much as anything, is the belief in infinite progress. Because it is our belief in the fallibility of our current assumptions and in the solvability of problems that drives us forward.
In this context, optimism about the future isn’t only rational, it is self-fulfilling.
It is the nature of progress that there will always be new problems to solve. And with each solution, we take a step forward. This is an exciting backdrop for investors, entrepreneurs and the world at large.
It also implies that the key to progress, as much as anything, is belief in infinite progress. Because it is our belief in the fallibility of our current assumptions and in the solvability of problems that drives us forward. In this context, optimism about the future isn’t only rational, it is self-fulfilling.
Optimism about the future isn’t only rational, it is self-fulfilling
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